With the government getting a fair idea of sugar production in 2010-2011 crop season, commodities markets regulator Forward Market Commission (FMC) is planning to call a meeting of all stakeholders by the end of this month or early December to work out the modalities of re-starting sugar futures.

Last week, minister of state for food and agriculture KV Thomas had told the Parliament that sugar output is expected to be around 24.5 million tonne.

The meeting, which was earlier scheduled to be held after Diwali, was postponed because of prior engagement of FMC and some disagreement between stakeholders over the timing of the launch. Sources said the food ministry is also planning to seek information from FMC on the fate of sugar futures.

?We will soon call a meeting of sugar millers, traders and exchange officials to decide the time for launching sugar futures,? an official from the commission said, adding that all futures will start at the usual margin of 5-7%, which could be raised if volatility is seen in trading.

The government had suspended sugar futures trading in May 2009 following price rising to the unprecedented level of Rs 44 per kg in the Mumbai spot market in February last year.

Initially, the suspension was for six months and later extended till September 30, 2010. However, despite the lapse of suspension, futures trading in sugar could not resume.

Meanwhile, sugar production in 2010-2011 is expected to be around 24.5 million tonnes, up from 19 million tonne last year and mere 14.7 million tonne in 2008-09 on good acreage and higher yields. Though the production is almost 5 million tonne more than last year, industry representatives feel that it could be less as delayed crushing in Uttar Pradesh, one of the country’s largest sugarcane growing state and rains in some parts of Maharashtra could hamper final output.

The country is set for surplus sugar production this year after two successive years of deficit.

Experts, however, forecast that production will rise further on anticipated higher yield due to a favourable monsoon.

Exchanges that are eagerly awaiting FMC’s clearance include the National Commodity & Derivatives Exchange (NCDEX), the leading agri commodity exchange in the country, and the recently-launched ACE Derivatives and Commodity Exchange. Sugar was contributing significantly to the turnover of NCDEX before the ban.